Canada saw a rise in employment by 75,000 jobs in July, marking a 0.4% increase and leading to a drop in the unemployment rate to 6.4%, the lowest in two years. According to Statistics Canada’s recent labor force survey, the majority of these job gains were divided between full-time and part-time positions, with the wholesale and retail trade sector contributing 21,000 new jobs.
The report highlighted an increase in employment among individuals aged 25 to 54, particularly women in that age group. While the unemployment rate remained stable at 5.8% for men aged 25 to 54, it decreased to 5.2% for women within the same category. Ontario recorded the highest job growth among provinces in July, adding 52,000 jobs, mainly in the professional, scientific, and technical services sector. Similarly, British Columbia experienced a notable increase with 18,000 new job positions.
Manitoba and Nova Scotia also saw positive employment trends, with Manitoba showing a 0.8% rise, adding 5,900 jobs, and Nova Scotia increasing by the same percentage, resulting in 4,600 new jobs. Overall, Canada has gained 181,000 jobs since April and 196,000 from the previous year, continuing the positive trend seen in May and June.
CIBC senior economist Andrew Grantham commented that the job numbers surpassed expectations due to robust hiring in July. He noted a particularly strong summer job market for young people, with the unemployment rate for individuals aged 15 to 24 at its lowest level since early 2024. However, disparities were observed among racialized youth, with varying unemployment rates, including 22.6% for Black youth, 15.4% for Chinese youth, and 13.9% for South Asian youth, compared to 11.6% for non-racialized and non-Indigenous youth.
While the overall unemployment rate of 6.4% is the lowest in two years, Grantham mentioned that it remains slightly higher than full employment levels. BMO chief economist Douglas Porter highlighted the steady growth in the labor force over the past year but pointed out a slowdown in average hourly wage increases to 2.8% year over year.
Looking ahead, economists emphasized the importance of navigating potential trade challenges, including looming tariffs proposed by U.S. President Donald Trump. Despite the positive job market outlook, uncertainties remain, with Canada advocating for the removal of tariffs on imports and seeking relief from sectoral tariffs on industries like steel and aluminum. Talks regarding the Canada-United States-Mexico Agreement are set to resume in the coming months.
